Agenda item

Report of the Strategic Director of Adult Care, Housing and Public Health

Recommendations:-

That Cabinet resolves to recommend to Council:

1.    That the proposed 2020-21 Base Case Option 3 for the Housing Revenue Account Business Plan be approved.

2.    That the plan be reviewed annually to provide an updated financial position.

Consideration was given to a report which provided a detailed technical overview of the current position of the Housing Revenue Account (HRA) Business Plan and the reasons for changes to the plan.

It was reported that the Housing Revenue Account recorded all expenditure and income relating to the provision of council housing and related services, and the Council was required to produce a HRA Business Plan setting out its investment priorities over a 30 year period. Following the introduction in 2012 of HRA self-financing, the Council was awarded control over its HRA in return for taking on a proportion of national housing debt.

It was noted that since the last update to the plan, there had been no significant government policy changes that affected the business plan, however there were still some policies that had impacted on the plan:

·         Roll out of full service Universal Credit to all remaining working age tenants in   Rotherham since July 2018 onwards

·         Ongoing Right to Buy eligibility

·         Updated Guidance on Social rents permitting increases of CPI + 1% from 2020-21 onwards.

The Business Plan recognised the importance of continuing investment in new affordable homes, focused on the next five years and would continue to be amended and reported annually. Given the economic uncertainty the overall position remained challenging, but in view of the level of reserves and the previous decision to defer some investment in stock until later in the plan the ability to divert resources to fund housing growth and contribute to the Council Plan remained.

Members noted that, over the short to medium term forecast, the Business Plan showed a sustainable level of cash flow and balances; however over the longer term there would be a significant squeeze on resources due to inflationary pressures. It was further noted that the key risks in the Business Plan were increased Right to Buy sales above those planned for, interest rate rises above those planned and inflation. Those risks were monitored continuously and mitigated by the Housing Service with support from Financial Services.

It was noted that the report had been the subject of pre-decision scrutiny by the Overview and Scrutiny Management Board on 20 December 2019, who had been supportive of the proposals.

Resolved:-

1.    That Council be recommended to resolve:

(i)            That the proposed 2020-21 Base Case Option 3 for the Housing Revenue Account Business Plan be approved.

(ii)          That the plan be reviewed annually to provide an updated financial position.